The $300 million elephant

By Steve Woodward

State Treasurer Dale Folwell has identified with tremendous clarity his next mission to keep North Carolina financially secure. He wants to prevent healthcare providers, UNC Health foremost among them, from fleecing the health plan for state employees to the tune of $300 million in the next several years.

Folwell, the first Republican state treasurer in 142 years, is sounding alarms in Raleigh. Many knew it was coming and yet still do not want to hear them.

He brought his message to Moore County Republican Men’s Club members and guests on November 19 in Pinehurst by raising a question that is both query and disparagement of the current system. “I know what you’re charging (the plan),” Folwell said. “What am I supposed to pay you?”

In other words, why don’t I know what I’m paying for before I decide on a course of treatment? This is otherwise known as competitive pricing. Capitalism, actually.

Reports the Winston-Salem Journal:

“Folwell wants to change how health care providers are reimbursed in an initiative that could save SHP members up to $60 million initially and $300 million overall. The plan is North Carolina’s largest purchaser of medical and pharmaceutical services at $3.2 billion in 2017. It represents more than 720,000 teachers, state employees, current and former lawmakers, state university and community college personnel and their dependents, and non-Medicare retirees and their dependents.”

When Folwell asked UNC Healthcare to provide documentation it hid behind patient privacy concerns. He asked a simple question and received redacted documents in reply. Folwell challenged UNC Healthcare to detail what medical procedures and pharmaceuticals actually cost and to prove that the state is receiving the discounts it negotiated. At the recent Men’s Club luncheon, Folwell displayed the thick stack of documents which appeared to have been generated by a faulty printer. No data, just page after page of blacked-out information. UNC Healthcare has raised a finger to the state treasurer. It’s the middle digit.

Why does Folwell persist? He knows waste and excess when he sees it. The state’s pension funds were paying Wall Street custodians $700 million in management fees when Folwell took office in 2016. He already has trimmed those fees by $100 million. Real money.

Currently, the state budget covers around four percent of the state health plan’s $3.3 billion — with a B — annual budget, even as annual healthcare costs are rising by 6.5 percent and pharmaceutical costs are projected to increase by 9 percent.